States and the Cliff, Today’s WSJ – More to Consider
Lumesis
By Gregg L. Bienstock
November 17, 2012

Todays’ WSJ, A5, provided some interesting information regarding the States and the “Fiscal Cliff”. The article points to a number of States taking steps to prepare for that “Thelma and Louise” moment. Regular readers of our weekly commentary (www.lumesis.com) know we have touched on this issue a number of times over the past few months. A few more facts to consider as the folks in DC “fiddle about” (name the band).

As we get ready for the onslaught of holiday ads, one might suggest the DIVER team is a step ahead by producing the map below that resembles a Christmas tree – unfortunately, it is anything but. Counties in orange have more than 5% (251 counties) of their workforce employed by the Federal Government and those in red have more than 10% (96 counties) employed by the Federal Government.

The chart below shows counties with greater than 20% employed by the Feds.

Source: DIVER Analytics; BLS.

How about States overall. California leads the way with 13.72% of its workforce employed by the Federal Government followed by DC (11.43%), Texas (10.98%) and Virgina (9.44%).

Source: DIVER Analytics; BLS.

As we have pointed out in earlier commentaries, many State and local governments have already taken steps to trim the fat. Absent a practical and constructive solution from our elected officials, we face the prospect of businesses cutting back and the Federal Government using a hatchet when a scalpel is needed. The potential impact on our already fragile recovery is difficult to fathom.